Even though the duration of the pandemic is uncertain, you must manage the challenges around your customers today, while setting yourself up for rapid stabilization and customer growth in the future.
We see action across four customer-strategy areas as critical to achieving lasting impact and creating value:
- Customer engagement – driven by disciplined approaches to consumer segmentation and lead generation, and moving faster to drive marketing and communications agility
- Growth drivers – shifting the mix to new sales channels and extracting value from existing innovation to drive product strategy
- Customer experience – prioritizing customer journeys and new means of engagement, experience and service
- The physical/digital divide – particularly solving delivery and last-mile challenges
The first step is creating a customer strategy and action plan by carefully canvassing these issues and defining key priorities for each. Time is of the essence: as economic activity returns, the full extent to which consumers have been pulled into a new era of digital behavior will become clear. If you’re lagging now, you may find yourself far behind, struggling to adapt old business models to a new world. Here’s your roadmap.
1. Take a disciplined approach to consumer engagement
An experience like COVID-19 exposes extremes in socio-economic, experiential, and environmental conditions by geography and consumer segments. How well do you understand your customers across these dimensions? The EY Index shows a third of consumers plan to reappraise the things they value most and not take certain things for granted. Do you know what those “things” are? It’s more critical than ever to be able to segment customers using first- and third-party data and use specific personas to listen to their needs, implement precise customer engagement strategies, and deploy personalization tactics. Here's what you can do to boost customer engagement - now, next and beyond:
- Conduct immediate social listening to assess sentiment
- Accelerate customer segmentation, digital lead generation and nurturing
- Build a new communications plan to bring to market evolved brand vision and values (with agency partners)
- Refresh loyalty programs to account for new digital and experiential means of engagement and new customers
- Build a feedback capability to incorporate changes in customer behavior and evolve to meet changing expectations across products and services
- Build real-time, dynamic customer segments and personas to drive modeling and lead generation, using robust automation to integrate the appropriate data across tools and workflows
2. Move faster to drive marketing and communications agility
Barely a month ago, companies were reaping the ongoing gains of a decade of economic growth. Today? Luxury-goods group LVMH has redeployed perfume plants to make hand sanitizer, fashion labels are sewing face masks, and everyone from Nike to SAP and Adobe has mobilized around new messaging embracing empathy and transparency.
Some 62% of consumers say they’re more likely to buy products from companies they feel are doing good for society – and 29% are prepared to pay a premium for brands that contribute to the community. COVID-19 is a reminder of how quickly the ground can shift beneath your feet, and it demands equally rapid and agile capabilities in messaging to customers and employees. This not only helps avoid reputational damage, but keeps pace with the rapidly evolving expectations of consumers themselves. They expect action from updated company websites to changed commercial messaging across channels. Avoiding being caught flat-footed requires an agile approach to creative across any and all channels to mitigate brand risk: from external media to social, public relations, communications, digital and investor relations. Here's what you can do to increase marketing and communications agility - now, next and beyond:
- Rapidly audit brand communication across paid, owned and earned channels
- Create a marketing communications rapid response team to oversee media triage
- Build sustainable, actionable customer listening dashboards with advanced analytics
- Build a new client-agency wiring plan for ongoing and crisis scenarios
- Build outcome-based models to align partners and share risk more effectively around faster response and stronger results
- Build technology-driven, double-blind links between internal and external data sets to be better equipped to share customer data across external partners without privacy issues, driving creative and media execution
3. Shift the mix to new sales channels, including virtualized sales
It’s easy to forget that, despite rapid annual growth in e-commerce year after year, online sales still comprised only around 12% of the United States retail sector at the end of 2019. COVID-19 may dramatically shift that balance, both in the US and globally. Social distancing has required retailers to close and limited consumer movement, leaving e-commerce as the only viable sales option for many business-to-consumer brands. Fitness companies have shifted en masse to a new model, for example, virtualizing their class experiences in an attempt to transition memberships and services to mobile and over-the-top (OTT) experiences.
The dramatic pace of consumer adoption and sudden effort to create or accelerate direct-to-consumer sales has exposed significant operational stresses, such as dealing with third-party digital commerce partners, which offer less data and control of the customer experience. Business-to-business brands have also quickly moved to remote sales calls via new technologies, forging the path to higher margins and more self-service integration. Here's what you can do to more quickly shift to new sales channels - now, next and beyond:
- Amplify existing digital-to-consumer e-commerce capabilities and capacity
- Build a virtual selling curriculum
- Evaluate potential scenarios across channels: face-to-face, inside sales, and self-service/e-commerce
- Build product taxonomy and solution-based selling methods to support all sales channels
- Further accelerate use of self-service and automated sales channels to increase margins while maintaining a high-quality customer experience
- Add new data-driven optimization layer to manage sales coverage and dynamically optimize sales channel usage
4. Extract value from existing innovation to drive product strategy
In times of extreme health and economic distress, you’re unlikely to invest in new product development and innovation in struggling segments. Yet rapid innovation is happening in booming sectors like healthcare, retail delivery services, and digital service and communication offerings. For those unable to invest in innovation, COVID-19 is spurring action around more straightforward and important strategies to extract value from existing portfolios – from bundling and unbundling packages to pricing models and value propositions by customer segment. Able to pursue innovation? Listening through analytics becomes even more critical to create value, not only across social channels but across a full range of data sources including third-party commerce and community sites which offer critical signals which are not yet consistently fully mined for insights. Here's what you can do to gain value from existing innovation to steer strategy - now, next and beyond:
- Look for quick virtualization of products and services (e.g. virtual workout classes)
- Prioritize products in portfolios highly relevant during the crisis (e.g. remote/home working, health/safety)
- Scale new services created through e-commerce/digital channels as stand-alone or sell-with proposition
- Build ongoing insights platforms to identify opportunities based on analytics on product feedback/listening across first- and third-party commerce
- Create ongoing crowd-sourced innovation strategy, tapping full internal talent pool and wide range of global sources
- Integrate enhanced listening dashboards into core workflows of all product management roles and key performance indicators
5. Prioritize digital journeys and new ways to engage and experience
With the extreme nature of the pandemic, companies accelerated the move to digital-first or digital-only customer journeys. You now have a mandate to accelerate those efforts and lean into experiences offering more data to drive optimization of outcomes. Particularly as the economic recovery may not be swift, this may be an opportunity for both growth and cost reduction. Here's what you can do to improve customer engagement and experience - now, next and beyond:
- Conduct an immediate “stress test” assessment of all digital journeys to look for quick fixes across: Learn / Buy / Get support
- Rapidly ingest existing data to create dashboards identifying pain points in journeys
- Develop customer journey maps and optimization recommendations for digital touchpoints
- Integrate operating model across digital marketing, shopper marketing, commerce and loyalty programs
- Move to journey/persona-based approaches and increase use of dynamic content optimization and personalization through all stages of customer engagement lifecycle
- Use data and artificial intelligence (where possible) to optimize decisioning across customer journeys
6. Lean into new ways to serve customers through virtualized service
Health and safety concerns limited on-the-ground workforce, call-center capacity, and customer operations. New protocols and capabilities were established for technicians and field operations, while the use of virtual service calls and self-service kits accelerated. For example, by April, Cox Communications had stopped visiting residences to service cable and internet customers, almost entirely shifting to remote service models.
While not all services can sustainably move to new methods, some can. Emerging technologies can be explored, like augmented reality, to extend the brand and drive effective and engaging virtualized service. Here's what you can do to explore emerging technologies to best serve customers - now, next and beyond:
- Create self-service kits together with remote and online service
- Build field safety protocols for on-site service, for services that cannot be virtualized
- Design virtualized service model including self-service kits, content, remote service delivery models, help desk, and collaboration tools
- Evaluate optimal service scenarios across channels: face-to-face, outsourced, automated and self-service
- Further accelerate use of self-service and automated service channels to increase margins while maintaining a high quality customer experience
- Explore augmented reality potential for service models using remote engagement technology
7. Build solutions to deliver products to end users and drive last-mile innovation
While many experiences have naturally transitioned to digital during the crisis, there are physical products with no replacement. The pandemic places new pressures on logistics and distribution, under extreme duress, to expand last-mile delivery capacity – Amazon alone is expanding its workforce by 175,000 to cope with increased demand. As grocery stores struggle to stock shelves amid consumer hoarding, new sources of supply have emerged including direct-to-consumer deliveries from restaurant suppliers who suddenly found new customers in a time where their core segments had completely disappeared overnight with restaurant closures. It is likely that innovation – from new last-mile real-estate plays to drones – is likely to proliferate. Here's what you can do to build solutions that steer innovation - now, next and beyond:
- Conduct immediate assessment of third-party e-commerce partnership effectiveness to triage issues and build action plan
- Partner with aggregators to expand on last-mile solutions
- Conduct an evaluation to rethink business strategy to re-purpose physical or digital space
- Leverage a real-time, digital view of the organization’s supply chain to provide availability and alternatives to businesses using IoT, advanced analytics, and AI to optimize delivery
- Develop proprietary solutions to reach customers anywhere at any time
8. Quickly gauge and respond to evolving consumer behavior
If there is one thing we know about the current crisis, it’s that companies are going to need to reframe their futures around very different digital behaviors. Trends we expected to evolve over the course of several years have suddenly become new norms, presenting a jolting wake-up call for everyone. Companies whose transformation efforts were lagging before the crisis need to accelerate rapidly and use data and technology to connect the dots driving customer connections and revenue growth. And those who were well placed before COVID-19 must still grapple with significant changes to spending patterns and behaviors that will only become fully evident as economies and traditional activities recover.
If you understand your role in the new landscape, you can set yourself apart from those deploying business-as-usual pre-pandemic approaches. The time to act is now. Many of the sudden changes in behavior – both business-to-business and business-to-consumer – will not revert, and if you fail to heed the new mandate to think and operate differently, you may find yourself struggling to catch up.
Summary
COVID-19 pandemic is shaping irreversible changes in consumer values, habits, consumption patterns and spending behaviors. To stay relevant, companies need to act now and set up a growth strategy focused on what they should do now, next and beyond COVID-19 to reframe their future around evolving consumer behaviors. Companies that act immediately will build lasting and meaningful relationships with consumers. Those who fail to respond and continue with their business-as-usual pre-pandemic approach will risk being left behind.
